At the meeting of Board of Directors of MCX Stock Exchange (MCX-SX) held today, the Board discussed and decided the following points:
- The Board noted that SEBI had accorded its approval to the appointment of the new MD & CEO and that he was likely to join shortly.
- The Board accorded its in-principle approval to make a 1:1 rights issue to existing shareholders in compliance with SECC Regulations and decided to have a meeting with institutional shareholder representatives on January 13, 2014 to obtain their concurrence on the proposal, after which the formal steps for the rights issue will be initiated.
- The Board asked the management to present a concrete proposal for restructuring of the Liquidity Enhancement Schemes of the Exchange so as to attract sustainable liquidity and optimize payouts. The Board also noted that the Exchange has been able to maintain business volumes even with about 50% reduction in LES payout.
- The Board authorised formation of a team from the Exchange for reviewing and renegotiating the existing contracts and agreements.
- The Board noted with appreciation the various cost reduction measures undertaken by the Exchange under supervision of the Special Committee of Public Interest Directors, particularly the discounts agreed to by the software vendor and the reduction of approximately Rs. 13 crore in quarterly expenditure from Q2 to Q3. The Board authorised certain further actions proposed for cost rationalization so that the viability of the Exchange could be put on a sound footing.
- The Board appointed a prominent firm of Chartered Accountants to conduct a comprehensive audit/review of the Exchange since inception and finalized the terms of reference of such audit/review.
- The Board also noted that the Exchange had made applications to SEBI for introduction of a new product in the F&O Segment and also for introduction of Interest Rate Futures in the CD Segment.
Based on the review undertaken in the meeting, Mr GK Pillai, IAS (Retd.), Chairman, MCX-SX, expressed confidence that with regard to the cost rationalization measures, proposed capital infusion plans and expected pickup in growth of business volumes, the Exchange is poised to see good business growth & stability and contribute to development of the Indian securities market.